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International Journal of Research in Business Studies ISSN: 2455-2992, Vol. 2 (2), Dec. 2017
December I 2017 IJRBS 5
Agribusiness Innovation in Nigeria: Issues, Opportunities
and Options for Growth
Yusuff, Utieyineshola Adeleke
Research Affiliate
Centre for Studies in Science Policy
Jawaharlal Nehru University
New Delhi, India
Abstract
This paper attempts to assess innovative approach to agribusiness in Nigeria
while taking account of the major issues and attendant opportunities
available in the sector with a view to redefining an attractive strategic option
that will deliver the anticipated business environment conducive enough to
sustain existing local players and enticing to a would-be foreign investor.
The effort was made to review past policies, programmes and projects
initiatives in the sector prior to Nigeria’s independence in 1960 down to date
and identifying the notable milestones achieved and those major setbacks
that are responsible for its current state. In this respect, various secondary
reference materials were the main source of data used for the study. SWOT
analysis was used to evaluate and redefine an appropriate strategic direction
needed for agribusiness to thrive. Also recognised was the effort of the
present Government of Nigeria in achieving its four (4) major priority focus
in areas such as food security, import substitution, job creation and economic
diversification as clearly stipulated in the newly launched Agriculture
Promotion Policy (APP) 2016-2020 document released by the Federal
Ministry of Agriculture and Rural Development (FMARD). The paper
revealed four (4) major strategic directions needed in the sector to catalyse
its growth, ensure food security, encourage youth and women inclusiveness
and handle post-harvest activities.
Keywords
Agribusiness, Innovation, Nigeria, Agriculture, Policy.
International Journal of Research in Business Studies ISSN: 2455-2992, Vol. 2 (2), Dec. 2017
December I 2017 IJRBS 6
1. Introduction
Nigeria is the largest economy in West Africa and the second largest in
Sub-Saharan Africa having a population of about 167 million people
and a land area of 923,768 km2 (AFDB, 2012). Despite this potential,
Nigeria is not food secured. Nigeria once had a record of a performing
Agricultural sector. Tracing it back to the era before the discovery of
oil, the impact of Agriculture on Nigeria’s economic performance was
remarkable. However, the country imports about $3 to $5 billion worth
of food annually, especially wheat, rice, fish and sundry items including
fresh fruits (FMARD, 2016). One of the major contributory factors to
this development is the high wastage level in production area which has
reduced supply to processing factories which explains why the country
will keep depending on importation. Meanwhile, the resultant effect of
this is limited job growth along the agriculture value chain firms input
production to market systems and continued use of limited foreign
currency earning to import varieties of food qualities to meet local
demand. FMARD (2016) report on gaps in Nigeria’s demand and supply
for key crops and activities indicates that there is a wide gap between
the two variables. For instance, as at 2016, where local demand for rice
was 6.3 million tons, the supply capacity was only 2.3 million tons; for
oil palm, where the demand was 800 million tons, only 4.5 million tons
capacity was locally available, also for demand for chicken which was
put at 200 million birds, the supply could only provide 140 million birds
for the growing local market.
There has been growing concern about this development considering the
fact that Nigeria is richly endowed with Agricultural resources which
are supported by various well-articulated sectoral policies and
developmental programmes from international development agencies.
Dating back to the pre-independence till 1970, the first, second and third
National Developmental Plan for Nigeria were put in place to harness
its huge potential in Agriculture. While Agricultural thrived at the
regional level during the early 60s, after some self-inflicted local crisis
during the late 60s, the country recorded low agricultural product which
informed some flagship programs from successive military regimes who
were the dominant pilot of the country’s affair at those time.
Programmes such as Operation Feed the Nations (1975-79), Green
Revolution Plan Scheme (1980), Structural Adjustment Programme
(1986) and the Agricultural Policy for Nigeria (1988-2000), which was
the first National Agricultural policy for Nigeria. However, during the
International Journal of Research in Business Studies ISSN: 2455-2992, Vol. 2 (2), Dec. 2017
December I 2017 IJRBS 7
post 1999 era when Nigeria return to democracy, President Olusegun
Obasanjo’s government reformed the National Agricultural Policy and
re-introduce it as The New Policy Thrust for Agriculture of 2002 which
led to the launch of various economic development reform for Nigeria
such as the National Economic Empowerment and Development
Strategy (NEEDS) launched in 2004. There was a major turn by the
Nigeria government commitment to agriculture in 2007 during the
President Umar Musa Yar’ Adua when he launched the Vision 2020
having a seven-point agenda for the country where it prioritised the issue
of Food security and Agriculture among other sundry issues that were
of major challenges to the development of Nigeria during this period.
Historically, major focus on Agribusiness in Nigeria became distinct
between 2010 - 2015 through the Agricultural Transformation Agenda
(ATA) initiative of President Goodluck Ebele Jonathan launched in
2010 which aimed to reform Nigeria’s attention back to Agriculture.
The ATA reform recorded unprecedented success in the history of
Nigeria as never-seen initiatives were made. For instance, the set-up of
the Growth Enhancement Scheme (GES) was put in place to register
smallholder farmers and provide target input subsidies to them through
the e-wallet platform. Also achieved was the restructuring of the
fertiliser procurement system - a major challenge to farmers in the past.
The latest policy development for the sector is the Agriculture
Promotion Policy (APP) for the year 2016-2020 which was launched on
the 21st of June 2016 by the present President of Nigeria, Mohammadu
Buhari. The APP has four (4) priority areas (Food security, Import
substitution, Job creation and Economic Diversification); eleven (11)
key objectives and three (3) thematic interventions to unlock the
Agricultural potential of the country. This is the first time in the history
of Nigeria that the issue of Agribusiness is clearly captured in its
agricultural policy. The APP under theme 2 (Crowding in private
investment), section 4.2.2 (Agribusiness Development) states the
prevailing constraints and the policy thrust of the Government towards
the development of Agribusiness in Nigeria.
The objective of this paper is to assess the potentials of Agribusiness
innovation in Nigeria particularly looking at the issues, opportunities
and options that could facilitate growth and open up the sector for
international investor’s participation, increase export and reduce import
index.
International Journal of Research in Business Studies ISSN: 2455-2992, Vol. 2 (2), Dec. 2017
December I 2017 IJRBS 8
2. Agricultural Sector in Nigeria
In order to understand how the Agricultural sector works in Nigeria, this
section looks at it from the dimension of its administrative structure and
various policies, programs and projects that have characterised the
sector dating back to the pre-independence era down to this present date.
2.1 Administrative Structure
In Nigeria, the Agricultural sector is being managed by the Federal
Ministry of Agriculture and Rural Development (FMARD) which
was established in 1966 with a mandate to regulate agricultural
research, agriculture and natural resources, forestry and veterinary
research across very states in Nigeria. The Ministry is also
responsible for optimising agriculture and integrating rural
development for the transformation of the Nigerian economy through
implementing various policies and programs that will ensure food
security and promote Nigeria’s socio-economic development through
food export in commercial quantity to the global community. This
Ministry is very key to the development of Nigeria in terms of
executing the agricultural transformation agenda set for the country,
focus on agriculture as a business particularly on its value chains
where Nigeria is seen to have comparative advantage, utilize the
transformation of the agricultural sector so as to create jobs, wealth
and food security. The Ministry is also to develop a strategic
partnership with all the stakeholders-State and Local Government;
Inter-Ministerial collaboration, private sector, farmer groups and
civil society; and the youths and women- involved in Agriculture so
as to stimulate investments capable of driving a market-led
agricultural transformation. Specifically, for Agriculture to serve as
the spring-board for attaining transformation in Nigeria, the Ministry
adopts various policies and legislations in terms of Fiscal policies,
Industrial policies, financial services policies and Agricultural
policies and through an enabling legislation for prioritising domestic
content for food production.
2.2 Review of Agricultural Initiatives in Nigeria Pre-Independence
era to Date
Agricultural policy is the combination of the outline and strategies
designed to achieve overall agricultural development and growth.
International Journal of Research in Business Studies ISSN: 2455-2992, Vol. 2 (2), Dec. 2017
December I 2017 IJRBS 9
According to the Ministry of Agriculture Policy Guide (2004),
Nigeria’s agricultural policy is the synthesis of the framework and
action plans of Government designed to achieve overall agricultural
growth and development. The Agricultural policy for Nigeria aims at
the attainment of self-sustaining growth in all the subsector of
agriculture and the structural transformation necessary for the overall
socio-economic development of the country as well as the
improvement in the quality of life of Nigerians. Since Independence,
the Nigerian government has made several developmental efforts
aimed at improving the performance of the agricultural sector
through designing and implementing various Agricultural initiatives.
The agricultural policies, programs and project initiated in Nigeria
since before and after independence is presented in Annex 1.
3. Concept of Agribusiness
Away from the common traditional system of practice, Agriculture has
evolved into Agribusiness and has become a vast and complex system that
reaches far beyond the farm to induce all those who are involved in
bringing food and fibre to consumers. Agribusiness is defined as the
various businesses that are connected with producing, preparing and
selling farm products. The term agribusiness was first introduced by Davis
and Goldberg in 1957. It represents three part system made up of, the
Agricultural input sector, the Production sector and the Processing-
manufacturing sector. Agribusiness includes all stakeholders involved in
the value chain which includes the farmer, the agriculture extension
workers, institutions and firms that provide the inputs and manufacture
food products, logistics services to the market and end consumer. This
captures the full meaning of the term “Agribusiness”. It is important to
visualise these sectors as interrelated parts of a system in which the
success of each part depends heavily on the functioning of the other two.
Today, Agribusiness system has undergone a rapid transformation as new
industries have evolved and traditional farming operations have grown
larger and more specialised. The transformation did not happen overnight
but came slowly as a response to a variety of forces. Knowing something
about how agribusiness came about makes it easier to understand how this
system operates today and how it is likely to change in the future.
International Journal of Research in Business Studies ISSN: 2455-2992, Vol. 2 (2), Dec. 2017
December I 2017 IJRBS 10
3.1 Contextual Classification of Agribusiness
As a complex system, Agribusiness comprises the input sector,
production sector, processing manufacturing sector and transport and
marketing sector. According to Chandrasekan et al. (2010), it is
directly related to industry, commerce and trade. The industry is
concerned with the production of commodities and materials while
commerce &trade are concerned with their distribution. Industry can
be Extractive, Genetic or manufacturing-based while commerce can
be grouped on the basis of volume (wholesale trade and retail trade),
basis of coverage (regional trade or national trade). As a social
institution, Agribusiness existence is dependent upon its harmonious
relationship with various segments of the society. The process of
evolving a mutual relationship between agribusiness farms and
various interest groups begins with acknowledging the existence of
the responsibilities of the manager. These responsibilities are towards
consumers, suppliers, distributors, workers, financiers, government
and the society. Yumkella et al. (2011) further classified it into four
main sub-classes Agricultural input industry: concerned with
factors responsible for an improved productivity in the sector such as
machineries, equipment and tools, inputs (fertilizer, pesticides &
insecticides, etc.); Agro-industry products: concerned with
agricultural products including food and beverages, leather products,
wood, textile etc., Equipment for processing: machinery, tools
storage facilities, cooling technology and spare parts; Financing,
Marketing distribution and other services firms: Storage, transport,
ICTs, packaging materials and design, etc.
3.2 Perspectives on Agribusiness: Global
Perspectives on the nature and performance of agribusiness
incubators across selected regions as provided in a various separate
country study report of International Bank for Reconstruction and
Development (Infodev) reports of 2014 are presented as follows:
Brazil - CENTEV/UFV Technology Incubator: This Centre was
established with an initial investment of about USD$8 Million largely
from the government of the State of Minas Gerais. To support its
expansion, the government also invested USD$6 Million in
constructing the incubator's space, a 1000m2 building specially
designed for business incubation activities.
International Journal of Research in Business Studies ISSN: 2455-2992, Vol. 2 (2), Dec. 2017
December I 2017 IJRBS 11
Chile – Fundacion Chile Incubator: It was created in 1976 as a non-
profit governed jointly by the Chilean Government and a large American
conglomerate. It has proactively introduced technology innovation and
developed companies in target industries including agribusiness, marine
resources, forestry, environment and chemical metrology human capital
and information and communication technologies. It has succeeded in
introducing a new method for packaging beef that enable’s ranchers to
export it more easily. Also, introduced raspberries, blueberries, oysters
and Salmon farming for profitable oversea markets.
India – ICRISAT Agribusiness Incubator: The incubator which is sited
in the state of Andhra Pradesh in India, is a result of a partnership
between the Indian government and an international Crop-research
organisation that is a member of CGIAR - a global partnership of
organisations seeking a food-secure future. It was created with an initial
funding of about $500,000 from India’s Department of Science and
Technology (DST) with a staff of three – a manager, Secretary and an
Assistant. The incubator now operates independent of its founders, the
International Crops Research Institute for Semi-Arid Tropics (ICRISAT)
and the India government’s DST. Having attained a developed status, the
incubator has now become an incubator of incubators and is now
assisting African Incubators on how to adopt its model.
Malaysia – Life Science Capital Fund (MLSCF): Founded in 2006,
MLSCF is a venture capital fund based in Kuala Lumpur, Malaysia. It
specialises in early-stage investments in companies that apply advanced
technology in the area of agriculture, industrial chemistry and healthcare.
MLSCF manages $150 million capital on a Public-Private arrangement
co-managed from two organisations, The Malaysian Technology
Development Corporation (MTDC) which is a government organisation;
and Burrill & Company, a San Francisco-based merchant Bank in The
United States. It operates on the concept it tagged “Science without
borders” through a process of open innovation which has facilitated the
transfer of world-class biotechnology into Malaysia and now exporting
the technologies to other less-developing countries.
Mexico – Fundacion Jalisco Incubator: The incubator was created
through a constitutional act in 2006 but started operation in 2007. After
hearing of the success of the Foundacion Incubation in Chile, the
Governor of Mexico State of Jalisco sought to recreate same in his State,
International Journal of Research in Business Studies ISSN: 2455-2992, Vol. 2 (2), Dec. 2017
December I 2017 IJRBS 12
Jalisco. The incubator which relies on a combination of state funding and
private investment seeks to import successful business models to small
farmers in Jalisco. Hence, it imported high-yielding blueberry plants
from U.S and a started a nursery in Jalisco from where it was able to
produce more blueberry plants and gave the plants to its local farmers
who are capable of growing them successfully. Now the State sells its
blueberry produces throughout Mexico, and overseas majorly U.S. and
U.K.
Mozambique - TechnoServe Mozambique (TnsMz): TnsMz is a
financially autonomous division of Technoserve Group (TnsGp), a non-
profit Corporation specialised in agribusiness development worldwide. It
is not a traditional incubator as it offers no centralised facilities for
practising and retaining business skills, but rather serves its clients where
they do business especially in the rural areas where crops and animals
grow. Its program is designed to stimulate investment, job creation and
local economic activity within the agribusiness sector; provide incentives
in the form of grants or matching grants to change behaviour and to
introduce new technologies within farm-to-market chains. It has
pioneered “best practices” template with successes in cashew, banana,
and poultry industries in the country.
South Africa – Timbali Technology Incubator: is a not-for-profit
company in South Africa founded in 2003 by CEO and co-founder
Louise de Klerk to help rural farmers whose livelihood has been undercut
by high-value large farmers. Basically funded by the South African
Development of Trade and Industry’s Small Enterprise Development
Agency (SEDA). Since inception, it has dispersed two grants totalling R
20,000,000.
Uganda – Uganda Industrial Research Institute (UIRI): It is the
Uganda government-led Agency for Industrialization and technological
innovations as a traditional incubator established by the Act of Uganda
Parliament in 2002. Majorly collaborate with other regional business
incubator models. It has made a significant impact by locating value-
added processing systems from its Kampala Headquarters into farmer
communities.
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December I 2017 IJRBS 13
3.3 Agribusiness Innovation in Nigeria: Recent Effort from Nigerian
Government
Not until between the year 2010 – 2011, there has been no significant
effort from the government towards exploring Agribusiness
development as a means to boost the agricultural performance of the
country and invite foreign investment. Noting this gap, President
Goodluck Jonathan’s administration, in 2010, in an effort to revamp
the agricultural sector, implemented a 5-year strategic plan 2010-
2015 tagged the Agricultural Transformation Agenda (ATA)
aimed to refocus Nigeria’s attention back to Agriculture. ATA as a
strategy, was to address two major challenges that have continued to
slow-pace growth and performance of the sector. First, it recognised
its inability to meet domestic food market requirement and secondly,
its inability to export at the quality level required for market success.
Through a well-planned strategy, some of the objectives of ATA
were achieved specifically in six (6) areas such as Input supply,
finance, infrastructure & logistics, production, market access and
institutional reform (FMARD, 2016). Despite this tremendous
success, some gaps were established after 2015. These gaps were
identified by the current administration of President Mohammadu
Buhari, which led to the launch of another 4-year strategic framework
tagged, The Agriculture Promotion Policy (APP). APP will span
between 2016-2020 with priority in four major areas (Food security,
Import Substitution, Job Creation and Economic Diversification);
eleven (11) key objectives and three basic key thematic intervention
areas (Productivity enhancements, Crowding in Private sector
investment and FMARD Institutional Realignment). Figure 1 below
provides an overview of APP.
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December I 2017 IJRBS 14
(Source: Author, 2017)
Figure 1: Overview of APP 2016 - 2020
THE NIGERIAN AGRICULTURE PROMOTION POLICY (APP) 2016 - 2020
Objective (11)
Priority Areas (4)
Thematic Intervention
(3)
Productivity Crowding in private
sector investment
FMARD Institutional Realignment
Food Security
Import
Substitution
Job Creation
Economic
Diversification
Agaric as business
Economic growth &
security
Food as a human right
Value chain approach
Prioritise crop
Market orientation
Climate change & environmental sustainability
Participation &
inclusiveness
Policy integration
Nutrition
Linkage with sectors
Access to land
Soil fertility
Access to
information and
knowledge
Access to inputs
Production
management
Storage
Processing
Market & Trade
Access to
finance
Agribusiness investment
development
Institutional
setting & role
Youth & women
Infrastructure
Climate smart
Agriculture
Research &
Innovation
Food
Consumption &
Nutrition Security
International Journal of Research in Business Studies ISSN: 2455-2992, Vol. 2 (2), Dec. 2017
December I 2017 IJRBS 15
3.4 Perspective on Agribusiness: Nigeria
Agribusiness incubation in Nigeria can be defined into two major
categories: Government-Driven and Privately-operated.
A. Government-Driven
Business Incubation Platform (BIP): This facility is housed in the
International Institute for Tropical Agriculture (IITA) Ibadan,
Oyo State in the Western part of Nigeria. The mode of operation
of BIP is similar to how the chicken egg is incubated. It conceives
ideas and needed technologies to drive or transform the sector
(Egg), it then provides a favourable condition for their
development (Incubation), and then hatch these ideas for the
world to use and derive benefit from. The BIP strategy is to
support IITA’s strategic goals and accelerate the commercial
development of IITA’s proven and profitable Research for
Development (R4D) technologies. It operates on a two-prong
commercial development avenue focus where IITA’s scientists
create Innovative products with the potential for
commercialization, and then Initiate & build a network of public
and private sector partners that will support the activities of small
to medium-scale agribusiness entrepreneurs, initially within
Nigeria and later on, elsewhere.
So far, BIP has been able to incubate some Agribusiness Start-
ups in its facility. Some of them are:
GoSeed: This start-up’s business operation strategy is charged
with the production and marketing of quality breeder and
foundation seeds/planting materials.
Nodumax: Provides solution for an improved legumes
production. The Nedumax legume inoculant is a product that
contains Nitrogen-fixing rhizobia to colonise roots of soybeans
and transform the crop into what is termed “Biological Factory”.
AflasafeTM: Produce biological control solution that drastically
reduces aflatoxin contamination in maize and groundnut. In 2014,
the start-up received a seed grant approval from African Union
Commission (AUC) and the UNDP to establish the incubation
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December I 2017 IJRBS 16
centre in Nigeria. It also made significant progress in Nigeria on
the registration, manufacture and commercialization of
AflasafeTM, an effective technology for Aflatoxin mitigation in
Africa.
B. Private-Driven
Unlike what is obtainable in the Information and
Telecommunication Sector where the number of Tech Start-ups
is much, enjoying support and recognition from Government,
there are few privately-operated Agribusiness incubation with
start-ups providing a various solution for the sector. Some of the
players in this sector include:
Agribusiness Incubation Centre (AIC): The Centre was
founded by Premier Agricultural Development Limited (PAD) in
2012 as a hybrid organisation. It is currently in its growth stage.
Basically, PAD conducts its business activities at AIC producing
and processing agro-products and providing services all for a fee.
It has been able to record remarkable recognition for its
unparalleled service. Awards received include; The Federal
Government of Nigeria’s Youth Enterprise with Innovation in
Nigeria (YouWIN) Grant Award in 2012; Batadon community
Honours recognition for contribution to community development
award; Building Entrepreneurs Today-3 (BET-3) award by
Diamond Bank PLC and EDC/Pan Atlantic University.
AgroHub Agribusiness Incubation Centre: An initiative of
AgroinfoTech Africa, an information and communication
Technology Company founded with a primary purpose of adding
value to agriculture and agribusiness in Africa using new
technologies. The centre is driven by a Public-Private partnership
arrangement. Its focuses on Research, Technology and
Entrepreneurship where it operates through incubating in-house
ideas and embrace disruptive innovations in agriculture that can
transform Agribusiness in Africa.
International Journal of Research in Business Studies ISSN: 2455-2992, Vol. 2 (2), Dec. 2017
December I 2017 IJRBS 17
4. Discussion
The APP 2016 -2020 strategic plan identified the need to attract private
sector investment to develop agribusiness in Nigeria. This was captured
in detail under the theme 2 (crowding in private investment) section 4.2.2
(Agribusiness Development) of the policy where it was specific on the
major prevailing constraints and thrust for its effective impact. However,
for this to be successful, there must be an effective institutional framework
that will guide the investment direction into the country in the area of
Agribusiness. For a foreign investor to take the leap into investing in this
sector is a function of weighing the business environment where the
Agricultural practice is played in Nigeria. The competitive capacity of
such market rest upon identifying the issues or challenges hampering the
growth of the sector and how they are managed through effective policies
from the government, available opportunities and a clear sustainability
potential existing in such market. Hence, this discussion dissects these
three key issues within the Nigerian Agribusiness context.
4.1 Issues
Available statistics from the FMARD as an outcome of two surveys
conducted in 2013, identified the major issues that exist within
Nigeria’s agribusiness environment while also presenting them
according to their perceived ranking level as; Lack of government
coordination (100%), inconsistencies in policy, regulatory, laws, taxes
and administrative practices (94%), lack of security of raw material
supplies to food processors (75%), lack of human capital (50%).
Further analysis (FMARD, 2016) revealed the major constraints to be:
Absence of appropriate and adaptive processing technology at small
scale level; Absence of rural infrastructure to support rural primary
processing; Inadequate capacity for processing or crude processing
methods; Lack of quality control and standard; Low private sector
investment in agriculture/agro-processing; Absence of low cost,
market-oriented research prototyping; Inaccessibility and high cost of
fund for agro-processing; Low level of capacity of local fabricators;
Poor quality of information and irregular dissemination impedes
investors’ abilities to properly plan investments; No single point of
contact: Investors do not know how to find available services and are
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December I 2017 IJRBS 18
compelled to interact with resources across multiple MDAs to achieve
their objectives; III-timed service delivery: Delivery of Government
service are frequently delayed, while contracts and MoUs with MDAs
and State Governments can go unfulfilled. These issues calls for
government intervention in the sector by addressing focal issues
pertaining to policy framework for sector, more political commitment,
adoption and utilization of latest agricultural technology, tackle
infrastructural deficit, improve financial support and reduce
associated risks, reformation and realignment of institutions
connected to the agriculture sector so as to be more agribusiness-
oriented.
4.2 Opportunities
The African Development Bank report of December 2012, in its
Country Strategy paper assessing the Agricultural ecosystem of
Nigeria and potential for growth between 2012-2016, identified some
opportunities within the sector to include:
I. Potential to become a major player in the global economy.
II. Abundant natural resource endowments for agro-allied input
production e.g fertiliser.
III. Agricultural and manufacturing potential.
IV. Rapid urbanisation which represents an opportunity for
diversifying income and economic growth.
V. Regional integration: Nigeria is a regional power in West Africa
whose economy represents about 55% of West Africa’s GDP,
and its population of about 167 million provides the largest
market in Africa.
VI. Abundant Human resources and professionals.
4.3 Options for Growth
According to Nicole (2016), SWOT analysis is an analytical
framework that can serve as a precursor to any sort of a firm’s action,
such as exploring new initiatives, making decisions about new
policies, identifying possible areas for change, or refining and
redirecting efforts. The method was created in the 1960s by business
gurus Edmund P. Learned, C. Roland Christensen, Kenneth Andrews
International Journal of Research in Business Studies ISSN: 2455-2992, Vol. 2 (2), Dec. 2017
December I 2017 IJRBS 19
and William D. Book in their book “Business Policy, Text and
Cases”. Hence, SWOT analysis is often used during strategic
planning. A detailed Strength, Weakness, Opportunity and Threat
(SWOT) analysis of the Nigeria agricultural ecosystem will provide
potential options for growth that are critical to the success of
sustainability of the sector. SWOT matrix on the Nigerian
Agricultural sector was derived from various reports (AFDB, 2012;
FMARD,2010; Aderibigbe, 2014; Uche, 2011; Iwuchukwu and
Igbokwe, 2012) conducted by scholars and expressed in Table 1.
Strength (S)
S1-Abundant Human
Resources
S2- Most preferred
destination in Africa
S3-Second largest
economy in Africa
Weakness (w)
W1-Weak business
environment and
competitiveness
W2-Low productivity
W3-Post-harvest loss
Opportunities (O)
O1-High potential for
major player in global
economy
O2-Abundant agro-allied
resources
O3-Strong potential for
Agricultural base
O4-Increasing
population and
urbanisation
Strategic Decision
How do we capture
markets (local and
international) utilising
available resources that
are in abundance?
Strategic Decision
How do we increase
agricultural production
to meet demand?
Threats (T)
T1-Political Instability
T2-Infrastructural Deficit
T3-Corruption and
resource
mismanagement
T4-Weak public finance
management
T5-Insecurity
Strategic Decision
How do we establish
institutional trust and
effective management of
the fund to attract
foreign investors?
Strategic Decision
What innovative
approach can be
adopted to boost
productivity amidst
prevailing challenges?
(Source: Author, 2017)
Table 1: SWOT Analysis of the Nigerian Agricultural Sector
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December I 2017 IJRBS 20
From the SWOT Analysis conducted on Nigeria Agricultural sectors as
shown in the above Table 1, four key strategic questions were raised which
are key to the success of Agribusiness in Nigeria. They are:
1. How do we capture markets (local and international) utilising available
resources that are in abundance?
2. How do we increase agricultural production to meet demand?
3. How do we establish institutional trust and effective management of the
fund to attract foreign investors?
4. What innovative approach can be adopted to boost productivity amidst
prevailing challenges?
Based on these four strategic decision questions, as an options for growth in
the sector Government needs to consider promoting more investment in the
sector ensuring that they are properly managed and targeted in line with
projects and programmes that will promote the conducive environment for
investments from the private sector; increase financial support for
agricultural developmental initiatives both at the federal and state level that
will attract participation from youths and women in the society, thereby
reducing unemployment, poverty and creating wealth; encourage innovation
for productive research activities in the country. The post-harvest handling
of agricultural produce is an important component of value chain
development, and a catalyst for progressive and sustainable expansion of
agribusiness, investment and agro-processing activities, thereby eradicating
waste and ensuring import substitution, food security, wealth creation,
employment generation, human capital development and security of human
life and property.
5. Conclusion
From the foregoing, it can be seen that the potential for deriving greater
performance in the Agricultural sector in Nigeria is high. With proper
implementation of the current Agriculture Promotion Policy 2016-2020
strategy, adopting an innovative approach towards agribusiness
development will raise the performance of Agriculture from its current
23% share of GDP as at 2016, improve production activity mix of the
sector, and also increase the share of non-export earnings above 75%. This
will definitely meet the targets of the APP regarding food security, import
substitution, job creation and economic diversification.
International Journal of Research in Business Studies ISSN: 2455-2992, Vol. 2 (2), Dec. 2017
December I 2017 IJRBS 21
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Appendix 1: Some Agricultural Development Initiatives and Policies in
Nigeria (Pre-Independence to Date) SNo Period Policy Aims and
Objective
Focused Area Strategy Impact
1 Pre 1970 First National
Development
Plan 1962 1968
To explore the
abundant natural
resources for
improvement of the
living standards of
the Nigerian People
Infrastructural
development
Designed such that
regional governments
also implement their own
developmental plans to
support the Federal
Government
By the end of the 1960s,
Nigerian Agricultural
economy was not growing as
expected. There was declining
export of crop products and
mild food shortages. Reason
attributed to the Nigerian civil
war
2. 1970 – 1985
Post-Civil
war era.
Second
National
Development
Plan 1970 –
1974
To restore the
economy damaged
by the Civil war
Crop
production
Government rely on food
import than strengthen
local production
Witnessed massive
government involvement in all
facet of agriculture
production. It also witnessed
an unprecedented deluge of
agric policies, programs,
projects and institutions.
Third National
Development
Plan National
Accelerated
Food
Production
Project
(NAFPP) –
1974
To increase the
production of rice,
maize, millet,
sorghum, cassava
and wheat.
Crop
production
Supply of improved
seeds, chemical fertilisers
and pesticides, education
of farmers, the sale of
agricultural products and
stock management and
processing. Build Agro
Services Centres (ASCs)
all around the country for
effective service delivery
to the public.
The ASCs failed to provide
Agricultural inputs at the right
time (Ogen, 2007)
3 1970 – 1985 Agricultural
Development
Project (ADP)
1975
To help organise
farmers into more
productive
Agriculture through
provision of
Agricultural inputs
Agricultural
inputs such as:
Construction of
Agricultural
roads, building
of small-scale
dams and
setting up of
Agro Service
Centre
Set up facilities in all
states across Nigeria
Over 470 ASCs were
established all over Nigeria at
the end of 1985 (Ogen, 2002)
Operation Feed
the Nation
(OFN)
Launched on 21
May 1976
To build a stable
and self-sufficient
socio-economic
system through
everybody’s
participation.
Food
production
Utilise all available piece
of land in urban, sub-
urban and rural areas for
farming.
Distribution of fertilisers
and improved breeds did
by all ( farmers, citizens,
military men, civil
servants)
Increase food production to
sufficient level to feed
growing population and lower
import dependency ratio.
1976 River Basin
Development
Authorities
(RBDAs)
To boost economic
potentials of water
bodies like
irrigation, fishery,
hydroelectric power
generation, domestic
water supply.
Production and rural
infrastructural
development
Water Supply Established eleven
RBDAs through River
Basin Development
Decree 25 of 1976
(Ayoola, 2001)
A number of authorities grew
out of proportion and the
operations of some suffered
from intensive political
interference. Substantial
public funds were wasted to
streamline sizes and functions
of RBDAs through the
disposal of their non-water
assets. (Iwuchukwu and
Igbokwe, 2012)
4. 1979
Change to
Democratic
Government
Fourth Nationa
Development
Plan1981 -1985
Green
Revolution
To achieve self-
sufficiency in food
production by 1985
when the 4th ends
Comprehensive
development of
rural areas
through;
Building food
Avoid dependence on
developed countries for
manpower and
technology
Failed in developing
Agriculture sector. The GRP
scheme led to an increase of
inequality in the rural areas
where land owners became
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December I 2017 IJRBS 24
Plan (GRP)
Scheme 1980
processing
firms, develop
rural roads,
provide houses,
improved
education and
health
facilities,
installation of
water and
electricity.
richer to the disadvantage of
the poor farmers
5 1986 – 1999 Structural
Adjustment
Program (SAP)
July 1986 This
was a mix of
demand-side
policies,
supply-side
policies and
other policies to
improve
competitiveness
To correct existing
price distortions in
the economy and
structural
imbalances, promote
non-price factors,
encourage local
production and
protect agricultural
and local industries
from unfair
international
competition.
Local Agric
production
industries
Abolition of a marketing
board for scheduled
crops. Ban on food
imports e.g livestock,
product, rice, maize,
wheat, vegetable oil, etc.
substantial cut in
agricultural input subsidy
Privatisation and
commercialisation of public-
owned agricultural enterprises.
Establishment of rural
agriculture development
institutions such as Directorate
of Food, Roads and Rural
Infrastructure (DFRRI),
National Directorate of
Employment (NDE), and re-
organisation of some existing
institutions like the River
Basin Development
Authorities (FMARD, 2001)
6 1986 – 1999 First National
Agriculture
Policy
Agricultural
Policy of
Nigeria” 1988 –
2000
Seven broad
objectives;
Attainment of self-
sufficiency in
basic food
commodities
Increase in
production of
agricultural raw
materials
Increase in
production and
processing of
exportable
commodities
Modernization of
agricultural system
with improved
technology and
management
Creation of more
agricultural and
rural employment
opportunities
Protection and
improvement of
agricultural land
resources and
environment
Establishment of
appropriate
institutions and
creation of
administrative
organs.
Food
production
Profitability of the
agriculture system and
farmer welfare.
Led to sub-sectoral policy
formulation such as;
I. Land resource policy
II. Natural agricultural
mechanisation policy
III. National cooperative
development policy
IV. National seed policy
V. National policy on
integrated rural
development
VI. Institutional arrangements
of the Agricultural
Ministry
(FMARD, 2001)
7 29th May
1999 to
Date
Return to
Democratic
Government
Led by
President
National
Economic
Empowerment
and
Development
Strategy
(NEEDS) 2000
To implement
integrated rural
development
program to stem
rural-urban
migration through
provision of help to
Agriculture,
Poverty
eradication,
employment
generation,
wealth creation
and value
orientation
Offer farmers improved
irrigation machinery and
crop varieties which
would help boost
agricultural productivity.
Private sector
involvement with specific
role enumerated Ensure
Brought about cordial
relationship between Federal
Government and State level
planning
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December I 2017 IJRBS 25
Olusegun
Obasanjo
Industry, small and
medium scale
enterprises and oil
and gas
state-level participation
through establishment of
the State Economic
Empowerment and
Development Strategy
(SEEDs)
The New
Policy Thrust
for Agriculture
of 2002
Review of 1988
Agriculture
Policy in 2001
To Achieve self-
sufficiency in basic
food supply & food
security.
Increase production
of raw materials for
industries
Increase production
& processing of
export crops
Generate gainful
employment
Rational utilisation
of agricultural
resources and its
protection
Promote increased
application of
modern agriculture
production
technologies
Improve the quality
of life of rural
dwellers
Food
production
Introduction and adoption
of improved seeds & seed
stock Adoption of
improved husbandry and
appropriate machinery
equipment Efficient
utilisation of resources
Small-scale farmer’s role
recognition
Encouragement of
ecological specialisation
Reduce risks &
uncertainties in
Agriculture All-inclusive
extension delivery system
Promotion of Agro-allied
industries
Led to the launch of an
economic development reform
in Nigeria.
2002 National
Special
Programme for
Food Security
(NSPFS)
January 2002
To assist farmers in
increasing their
output, productivity
and income
Strengthen research
effectiveness
Support government
effort towards
promotion of simple
technologies for
self-sufficiency
Food
production and
rural poverty
To be implemented in all
the 36 states of Nigeria in
line with the project
objectives
There were setbacks to
success of the program as;
Inability of beneficiaries to
repay their loans on time
Difficulty in integrating
technology into existing
system
Insufficient knowledge of
credit use
Poor extension agent-farmer
contact
Lack of storage facilities and
high cost of farm input
8 2007
President
Umar
Shehu
Yar’Adua
Vision 2020
launched with a
7-point Agenda
areas
1. Energy and
Power
2. Food
security and
Agriculture
3. Wealth
Creation
4. Education
5. Land
Reforms
6. Mass
Transit
7. Niger Delta
Issue
The food security
and Agriculture in
the Agenda aims to
Create conducive
Macro-environment
to stimulate private
sector investment in
Agriculture
Rationalise roles of
the tiers of
Government to
promote and support
growth stimulating
activities
Reorganise the
institutional
framework for
government
intervention in the
sector
Agriculture
Production
System
Articulate and implement
integrated rural
development Increase
agricultural production
through increased
budgetary allocation
2008 National Food
Security
Programme
(NPFS) for
(2010 – 2020)
To Ensure
sustainable access,
availability and
affordability of
Food
Production
Federal Government &
World Bank established
commercial Agriculture
Development Programme
(CADP)
Under the NPFS various
agricultural initiatives were
implemented resulting in
Significant increase in the
quality of assorted fertiliser
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December I 2017 IJRBS 26
Launched on
August 25,
2010
quality food to all
Nigerians
distribution nation-wide
Rehabilitation & expansion of
existing irrigation scheme
Retention of Zero tariffs on
imported agro-chemical policy
(CBN, 2008)
9 2010 – 2015 Agricultural
Transformation
Agenda (ATA)
To re-engage key
stakeholders in
Nigeria Agricultural
sector in order to
shift focus towards
how a self-
sustaining
agribusiness focused
economy can be
built
Agribusiness Set-up the Growth
Enhancement Scheme (GES)
to register smallholder
farmers and provide target
input subsidies (E-wallet)
Improved access to inputs
such as fertiliser and seeds
by farmers
Revival and partial N15
billion recapitalization of
Bank of Agriculture
Engagement with
commercial Banks to finance
GES and boost lending to
agriculture from less than
1% to 6% of all credit by
2015
Creation of special funds to
support farmers e.g N10
billion cassava fund
Concession of federal
warehouses and storage
assets
Introduction of higher
yielding crop varieties e.g
cocoa, rice (Faro 42 and 44)
Re-establishment of select
commodity market boards
e.g cocoa market corporation
Reform of the Agricultural
Research council of Nigeria
(ARCN)
(FMARD, 2016)
10 2016 -2020 The
Agricultural
Promotion
Policy (APP)
Launched 21
June 2016
Agriculture as a
business
Agriculture as key
to long-term
economic growth
& security
Food as a human
right
Value chain
approach
Prioritise crops
Market orientation
Factoring climate
change &
environmental
sustainability
Participation and
inclusiveness
Policy integrity
Nutrition-sensitive
agriculture
Agriculture’s
linkage with other
sectors
Food security
Import
substitution
Job Creation
Economic
Diversification
Productivity
enhancements Crowding
in private sector
investment FMARD
situational realignment